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5 Reasons Why Auto Insurance Premiums Go Up

Posted on by Defensive Driving | in Defensive Driving Tips

We all know auto insurance is a necessity. However, sometimes premium spikes in insurance coverage seem to be unavoidable at times. As a result it has been advisable to shop around for the best rate on auto insurance you can find. Despite your best efforts, there are certain conditions that almost guarantee an auto insurance spike. Here are 5 reasons why insurance premiums go up:

Mercedes Benz cars in traffic

New Insurance Quotes

Auto insurance companies often quote one price and after crafting a policy the final cost is more than the quote. Why do automobile insurance quotes go up?

All auto insurance companies need to assess and balance the risk-to-reward ratio. Insurance companies assess profitability based on a potential customer’s driver record and habits.

Dodge Charger 2018 Dashboard

Insurance Quotes for New Vehicles

The value of a new car is more than that of an older vehicle. It stands to reason that replacing the newer model will be more expensive than replacing an older vehicle. When purchasing a new vehicle you should expect to see a rise in your insurance premiums.

Automobile insurance carriers use a combination of factors to attempt to give you a new vehicle insurance quote. They look at your driving record, vehicle make, model year, occupation and credit history. If the insurance carrier qualifies you as low-risk you will see low rates, comparatively speaking. Brushes with the law, and a poor credit history means a higher than average insurance quote.

In addition to the aforementioned, if you lease or finance a new vehicle, most lenders and state laws require full insurance coverage.

Moving Further Away From Work

The idea here is that the further you have to drive to work, the greater the risk that you could get into an automobile accident. If your employment requires frequent driving it may also add to your monthly auto insurance premiums.

Single vs. Married

Auto insurance providers categorize policy holders based on their marital status. Insurance companies categorize single individuals as high risk investments. Married customers with children are considered a lower risk.

Traffic Violations

Auto insurance companies frequently scan for any recent traffic violations and citations. If they learn of any misconduct or pending cases for moving violations you might see a one to two year premium spike.


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